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Disney share price down 2% this week after unveiling new streaming bundle pricing

The Walt Disney Company saw its share price slide 2% this week after delivering mixed third quarter results and revealing new streaming bundle pricing.

The Walt Disney Company fell more than 1.4% to $1.37 a share this week after the company reported a mixed set of third quarter (Q3) results on Tuesday and unveiled its new streaming bundle pricing.

The Star Wars franchise-owner said that its upcoming streaming service, named Disney+, will be available as a bundle that includes ESPN+ and Hulu for $12.99 – the subscription price as rival Netflix. Disney+ on its own will cost just $6.99 at launch, the company said.

Disney Q3 earnings fall short due to streaming investment

Disney saw revenues grow 33% to $20.2 billion, but total costs increased 55% to $17.5 billion compared with the same period a year prior, with the company’s direct-to-consumer business recording a loss of $533 million.

Its results reflect the costs associated with the upcoming launch of its Disney+ streaming service, with the business investing heavily in technology and new content for when it goes live in November.

Its Q3 earnings were also dampened by M&A-related activity, with a sub-standard performance from its 21st Century Fox film business, one of several assets Disney bought from the Murdoch media group in a $71 billion deal.

Netflix share prices slumps on Disney+ pricing

In the wake of the Disney+ pricing announcement, Netflix saw its share price slide more than 3.5% to £2.98 a share on Tuesday. However, in the days that followed Netflix’s stock clawed back its losses with it looking likely to end the week a touch higher than Monday’s open.

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‘We project [Disney] will win and [Netflix] will lose the US SVOD [subscription video on demand] battle,’ Senior Analyst at Needham Laura Martin wrote note to investors on Wednesday.

‘US consumers have shown a reluctance to add to their three SVOD services,’ she added. ‘This implies that [Disney’s] projected 20 million to 30 million US subs by 2024 will mostly come from Netflix’s 60 million US subs.’

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